UK Faces Record Fuel Price Surge Amid Iran Conflict and Mortgage Market Shock
UK hit by record rise in fuel prices, and ‘biggest mortgage shock since mini-budget’ as Iran war bites – business live
The Guardian
Image: The Guardian
The UK is experiencing a record rise in fuel prices, with petrol increasing by 20p to 152.83p per litre and diesel by 40p to 182.77p due to the ongoing Iran war. Additionally, mortgage rates have surged, marking the biggest shock since the 2022 mini-budget, complicating borrowing for many homeowners.
- 01Brent crude oil prices jumped over 6% to $107.63 a barrel amid escalating tensions in the Middle East.
- 02UK petrol prices rose by 20p to 152.83p per litre, while diesel surged by 40p to 182.77p in March.
- 03Fixed-rate mortgage costs have increased significantly, with two-year rates rising 100 bps to 5.84%.
- 04The mortgage market has contracted by 17%, reducing product availability for borrowers.
- 05Monthly repayments for remortgaging homeowners have surged by over £400, with affordability worsening for typical borrowers.
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The UK is grappling with unprecedented fuel price hikes and a significant mortgage market shock as the conflict in Iran escalates. Brent crude oil prices have surged over 6% to $107.63 per barrel, leading to record increases in fuel costs. Petrol prices rose by 20p in March, reaching 152.83p per litre, while diesel saw a staggering 40p increase, averaging 182.77p. This surge surpasses previous records and is attributed to the ongoing oil supply shock stemming from the Iran conflict.
In addition to fuel prices, the mortgage market is facing its biggest shock since the 2022 mini-budget, with average two-year fixed mortgage rates climbing by 100 basis points to 5.84% and five-year rates increasing by 79 basis points to 5.75%. The availability of mortgage products has contracted by 17%, making it more challenging for new borrowers and those looking to remortgage. The financial strain is evident, with typical borrowers facing an additional £150 in monthly payments on a £250,000 loan. The combination of rising rates and reduced product choice is creating a volatile environment for borrowers.
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The surge in fuel prices is straining household budgets, particularly for those who rely on their vehicles for daily commuting. Additionally, rising mortgage rates are making homeownership less affordable for new buyers and increasing financial pressure on existing homeowners looking to remortgage.
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